Are Roth conversions still worth it after OBBBA? For many retirees with large pre-tax balances, often yes, though the rationale has shifted. The 2026 rate sunset that drove much of the urgency is gone, so the question is no longer whether you can beat a legislated rate increase. It is whether you can beat your own future marginal rate.
Are Roth conversions still worth it after OBBBA? For many retirees, yes, but the reason changed. OBBBA (signed July 4, 2025) made the seven 2017 tax brackets permanent, so the 2026 rate sunset that created a deadline is gone. The structural case remains: converting can trim future required minimum distributions, soften the survivor filing penalty, and reduce lifetime and heir tax exposure.
The Short Answer: Yes, But the Reason Changed
Roth conversions are still worth it after OBBBA for many retirees roughly age 60 to 73 with sizable traditional IRA or 401(k) balances, but the deadline-driven pitch is dead. OBBBA (Public Law 119-21) made the current 10 percent to 37 percent brackets permanent, so the case now rests on your own future marginal rate rather than a legislated one, as the Q3 Advisors Roth conversion overview explains.
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What went away (the 2026 sunset deadline)
The convert before rates snap back to 39.6 percent in 2026 argument is retired. Because the brackets are now permanent, there is no legislated cliff forcing action by December 31, 2025, and no built-in risk that a conversion done at today’s rates looks overpriced against higher rates next year. If beating the sunset was your only reason to convert, that specific reason is now gone.
What survived (your personal tax trajectory)
Everything driven by your personal tax trajectory rather than the tax code’s calendar survived OBBBA. A growing pre-tax balance still compounds toward a required minimum distribution (RMD) spike. A surviving spouse still faces compressed single-filer brackets. Medicare surcharges (IRMAA) and the Social Security “tax torpedo” still recur every year. And under the SECURE Act 10-year rule, non-spouse heirs still inherit an embedded tax bill.
What OBBBA Actually Changed (and What It Didn’t)
OBBBA (Public Law 119-21) locked in the seven current federal rates and added a few new wrinkles for retirees, but it left every account-level driver of a conversion untouched. Understanding what moved shows why a permanent code can make a conversion easier to plan rather than less worthwhile. The table below contrasts the permanent 2026 rates with the pre-2018 rates that would have returned had the 2017 law been allowed to sunset.
| Bracket | Permanent rate (2026, post-OBBBA) | Rate if TCJA had sunset in 2026 |
|---|---|---|
| 1 | 10% | 10% |
| 2 | 12% | 15% |
| 3 | 22% | 25% |
| 4 | 24% | 28% |
| 5 | 32% | 33% |
| 6 | 35% | 35% |
| 7 | 37% | 39.6% |
TCJA rates made permanent
OBBBA made the seven TCJA brackets (10 percent through 37 percent) permanent, so the top rate stays 37 percent and the middle brackets no longer revert in 2026. Removing the sunset removes the deadline, but it also removes the chance that a conversion taxed today would look expensive against a lower future schedule. A conversion becomes a known, fixed cost measured against a more predictable future.
The 2026 itemized-deduction haircut for the 37% bracket
OBBBA limits the value of itemized deductions for top-bracket filers so that each dollar of deduction is worth roughly 35 cents rather than 37 cents (a 35 divided by 37 haircut). Filers in the 37 percent bracket who lean on deductions to manage taxable income get slightly less relief. A Roth conversion, by contrast, carries a fixed, known cost in the year you do it, so its certainty becomes comparatively more attractive.
The temporary senior deduction (2025 to 2028)
OBBBA created a temporary deduction of up to $6,000 per person age 65 and older ($12,000 for a qualifying couple), available for tax years 2025 through 2028. It phases out at 6 percent of the amount by which modified adjusted gross income (MAGI) exceeds $75,000 (single) or $150,000 (joint), and disappears at $175,000 (single) or $250,000 (joint). Because a conversion adds to MAGI, a large conversion can shrink or erase this deduction.
Four Reasons Conversions Still Make Sense With No Deadline
With the 2026 sunset removed, four durable, tax-trajectory reasons to convert remain: the RMD tax spike at 73 or 75, the survivor filing penalty, recurring IRMAA and Social Security torpedo exposure, and the SECURE Act 10-year rule for heirs. Each is about your future marginal rate rather than a legislated one, which is why the fear that OBBBA erased the case is largely misplaced.
The RMD tax spike at 73 or 75
A pre-tax balance you never touch keeps compounding until RMDs begin, and then the IRS forces income out. Using the Uniform Lifetime Table divisor of 26.5 at age 73, an illustrative $1,000,000 traditional IRA throws off a first-year RMD of about $37,736, stacked on top of Social Security. In an RMD year the RMD must be taken first and cannot itself be converted; see the 2026 RMD guide for the timing rules.
The widow’s / survivor penalty
The widow’s penalty is often a significant post-OBBBA driver. When one spouse dies, the survivor typically files as a single taxpayer the following year, with brackets that are roughly half as wide, even though much of the household income continues. The illustrative table below shows the same $120,000 of taxable income taxed under 2026 married-filing-jointly versus single brackets.
| Same $120,000 taxable income (2026, illustrative) | Married filing jointly | Single survivor |
|---|---|---|
| Approximate federal income tax | ~$15,800 | ~$21,400 |
| Extra tax as a single filer | Baseline | ~$5,600 more per year |
| IRMAA exposure (joint $218,000 vs single $109,000) | Below first tier | Above first tier |
The survivor pays several thousand dollars more each year on the same income and can also cross the single IRMAA threshold. Converting during the married-filing-jointly years, while both wide brackets are still available, is one way to pre-empt that compression.
IRMAA and the Social Security tax torpedo
IRMAA is a recurring Medicare surcharge. In 2026 the standard Part B premium is $202.90, and surcharges begin above $109,000 MAGI (single) or $218,000 MAGI (joint), on a two-year lookback, so 2026 income drives 2028 premiums. Rising RMDs can trip these tiers year after year, and the same income can make more of your Social Security taxable (the torpedo). A conversion lifts MAGI in the conversion year, so it must be sized against these thresholds.
Legacy under the SECURE Act 10-year rule
Most non-spouse heirs must empty an inherited traditional IRA within 10 years under the SECURE Act. If an heir is in the 32 percent to 35 percent bracket, a large share of an inherited pre-tax account can go to tax, while an inherited Roth generally passes income-tax-free. With the federal estate exemption at $15,000,000 in 2026, the binding constraint for most families is income tax on inherited pre-tax dollars, not estate tax.
The 2026 Planning Shift: From Beating the Clock to Filling the Brackets
With no sunset, the planning frame shifts from urgency to arithmetic: fill your lower brackets with converted dollars at a controlled, known rate during your lowest-income years, rather than letting the IRS choose the timing and rate later through RMDs and survivor filing. A permanent code makes a smooth, multi-year plan easier to commit to, and the numbers below show how the pieces fit.
The conversion window
The conversion window is commonly the gap between retirement and the start of RMDs, when wages have stopped but forced distributions have not yet begun, roughly ages 60 to 72. Those who retire early can extend this runway. Because a conversion is uncapped, taxable ordinary income with a December 31 deadline, the room you have in each low-bracket year is the constraint that matters.
Why spread conversions across years vs one big year
Spreading conversions keeps every converted dollar in a lower bracket. Compare converting $80,000 a year for five years, staying inside the 24 percent bracket, with $400,000 in one year. The lump sum pushes into the 32 percent bracket and can trigger IRMAA, so the same total is converted at a higher marginal rate. Permanence makes this patience safe, since no deadline forces the lump sum. For sizing, see how much to convert to Roth.
Fill to the lower of your bracket ceiling and next IRMAA tier
A useful ceiling is whichever comes first: the top of your current bracket or the next IRMAA threshold. For a couple, the 24 percent bracket runs to $403,550 of taxable income in 2026, but the first joint IRMAA cliff at $218,000 MAGI usually bites long before that. Many couples therefore fill toward the IRMAA line, leaving a small cushion so ordinary dividends or a year-end fund distribution does not tip them over.
The sacrifice-year senior-deduction tradeoff
Because the senior deduction reduces taxable income but not MAGI, it does nothing for IRMAA, ACA subsidies, or the Social Security torpedo. Giving up a full $12,000 couple deduction costs roughly $2,880 at 24 percent. In a deliberate sacrifice year, some investors accept that one-time cost when the conversion lowers future RMD-driven taxes; others prefer to keep conversions under the phase-out line. The right answer depends on the size of the future RMD problem.
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When a Conversion Is the Wrong Move
A Roth conversion is not universal, and honest guardrails matter. A conversion is taxable ordinary income in the year you do it, and since 2018 it cannot be reversed, as there is no recharacterization. Several common situations argue against converting, or against converting much, and each deserves a careful look before acting:
- A short time horizon or the likelihood of needing the money soon, so there is little runway for tax-free growth to justify the upfront tax.
- No outside cash to pay the tax, forcing you to withhold from the conversion itself, which shrinks the amount that reaches the Roth and can add penalties before age 59.5.
- Already sitting at or above the marginal rate you expect in retirement, so there is no lower-rate arbitrage to capture.
- A conversion that would push other investment income over the Net Investment Income Tax threshold ($200,000 single or $250,000 joint MAGI); a conversion is not itself net investment income, but the added MAGI can drag other income into the 3.8 percent tax.
For anyone weighing the tradeoff, a personalized break-even analysis is the cleaner way to decide than any rule of thumb.
Frequently asked questions
Did OBBBA make Roth conversions less valuable?
OBBBA removed one argument, the 2026 rate sunset, by making the 2017 brackets permanent. It did not touch the structural drivers: RMD bracket spikes, the survivor filing penalty, IRMAA surcharges, and the SECURE Act 10-year rule for heirs. For many retirees the core case is unchanged; only the “beat the deadline” framing is gone.
Are Roth conversions still worth it now that the tax cuts are permanent?
For many retirees with large pre-tax balances, they can be. Permanence removes the deadline but not the reasons tied to your own future marginal rate. Converting during lower-income years may reduce forced RMD income later, soften the single-filer survivor brackets, and lower the tax your heirs eventually pay on inherited pre-tax accounts.
Are Roth conversions dead in 2026 because of the new tax law?
No. OBBBA ended the deadline-driven “rates are going up, convert now” pitch, not conversions themselves. In 2026 the case rests on your own tax trajectory: filling the 22 percent and 24 percent brackets in low-income years, cutting a future RMD spike, easing the survivor penalty, and reducing what heirs owe under the SECURE Act 10-year rule.
How much can I convert to Roth without triggering IRMAA in 2026?
IRMAA surcharges begin above $109,000 MAGI (single) or $218,000 MAGI (joint) in 2026, on a two-year lookback, so 2026 income affects 2028 premiums. A conversion raises MAGI in the year you do it. Many investors size conversions to stay just under the relevant tier, leaving a cushion for dividends and year-end fund distributions.
What is the widow’s penalty and how does a Roth conversion help?
When one spouse dies, the survivor usually files single, with brackets roughly half as wide, even though much of the income continues. On the same illustrative $120,000, a single filer can pay several thousand dollars more per year than a couple and cross the single IRMAA line. Converting during the joint-filing years can pre-empt some of that compression.
Does the new senior deduction affect Roth conversion planning?
It can. The temporary deduction (up to $6,000 per person 65-plus, 2025 to 2028) phases out between $150,000 and $250,000 MAGI for couples. Because it lowers taxable income but not MAGI, it does nothing for IRMAA or the Social Security torpedo. A large conversion can erase it, so it is a factor in sizing rather than a reason to avoid converting.
What are the RMD start ages under SECURE 2.0?
RMDs begin at age 73 for those born 1951 through 1959, and at age 75 for those born in 1960 or later. The earliest an age-75 RMD applies is 2035, not 2033. Every year you delay converting is a year the pre-tax balance keeps compounding toward that first forced distribution.
Can I be forced to take an RMD before I convert to Roth?
Yes. In any year you are subject to RMDs, the required amount must be distributed first and cannot be rolled into a Roth. Only amounts above the RMD can be converted. This is a key reason many investors do their heaviest converting in the pre-RMD window, before the required distribution consumes part of the low-bracket room.
